Injured? Contact Sinas Dramis for a free consultation.


Celina Mutual Insurance Company v Lake States Insurance Company; (MSC-PUB, 6/25/1996; RB #1851)


Michigan Supreme Court; Docket No. 102683; Published 
Per Curiam; Unanimous  
Official Michigan Reporter Citation: 452 Mich 84; Link to Opinion alt   

Exception for Employer Provided Vehicles [§3114(3)] 
Recoupment Between Equal Priority Insurers [§3115(2)]

Legislative Purpose and Intent 
Workers Disability Compensation Act (MCL 418.1, et seq.)   

In this unanimous per curiam Opinion involving a priority dispute between two no-fault insurers, the Supreme Court held that the employer priority provisions of §3114(3) of the No-Fault Act apply when the injured person is self-employed and is operating an insured vehicle owned by the injured person In that situation, the insurer of the vehicle involved in the accident is solely responsible for no-fault benefits. In so holding, the Supreme Court reversed the Court of Appeals decision in Item No. 1774.  

The injured person in this case was the self-employed owner of a sole proprietorship wrecker and towing service. He sustained injury when the wrecker truck he owned and was operating was involved in an accident.The wrecker was insured by Celina Mutual pursuant to a policy it had issued to the wrecker service. Defendant Lake States insured the personal vehicles owned by the owner of the wrecker service. The Supreme Court held that under §3114(3) of the no-fault statute, sole responsibility for payment of the no-fault benefits rested with the insurer of the tow truck, as the injured person was occupying this vehicle, and it was owned by his "employer" which was really his sole proprietorship business. The Supreme Court rejected the argument of plaintiff Celina that a sole proprietor could not be an "employee" for purposes of §3114(3). In so holding, the Supreme Court rejected workers' compensation cases which have held that a sole proprietor is not an "employee" for purposes of the workers' compensation statute. The court held that reliance on workers' compensation cases is misplaced, as those cases rely on definitions in the statute or insurance policies. Moreover, the purpose of the workers' compensation statute was to protect the employee and the employer, which was in part accomplished by granting tort immunity to the employer from suits by the employee. In light of the fact that a self-employed sole proprietor cannot sue himself, mis purpose of the workers' compensation statute was not applicable.  

The court further rejected the claim of Celina Mutual that it was entitled to partial recoupment from the injured person's personal auto insurers under §3115(2) of the statute. In holding that the priority rested solely with Celina as the insurer of the business vehicle, the court stated:

"We believe that it is most consistent with the purposes of the no-fault statute to apply §3114(3) in the case of injuries to a self-employed person. The cases interpreting that section have given it a broad reading designed to allocate the cost of injuries resulting from use of business vehicles to the business involved through the premiums it pays for insurance. . . . In addition, in cases like the instant one, requiring both insurers to contribute to the payment of benefits would run contrary to the overall goal of the no-fault insurance system, which is designed to provide victims with assured, adequate and prompt reparations at the lowest cost to both the individuals and the no-fault system.... Splitting the obligation to pay would result in duplicative administrative costs, by requiring several insurers to adjust a single claim."

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

Copyright © 2022 Sinas Dramis Law Firm, George Sinas, Stephen Sinas.
All Rights Reserved.
Login (Publishers Only)